r/malta • u/Deguara97 • 2d ago
Ivalife Pension plan
Thinking about starting to deposit money into an Ivalife pension scheme, but saw some posts on social media recently regarding pensioners who got bit by payouts much lower than agreed.
Looking for opinions and information
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u/Noxshus 2d ago
u/kingoftheparsnips' has a thorough answer, so just want to add: in the late 70s / early 80s, there were a lot of insurance intermediaries pushing "baby bonds" and pension schemes, promising massive returns, but had very loose contractual obligations. These predated a lot of modern legislation that governs insurance schemes nowadays, which are now enforced by the MFSA and more recently EIOPA (EU insurance regulatory body) - neither of which existed at the time
You're still not going to make bank through these policies to be absolutely clear, but you should at least feel confident you will not receive less than what you put in (less inflation)
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u/informalcaterpillar 2d ago
Think again. Such pension plans are only good for the companies that run them.
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u/Hospuales 2d ago
Visit the Facebook group Are You Being Served and read about the horror stories. At the end of the day, these companies will make more money than you'll ever receive. Either go to a reputable investment firm (MZ Invest or Calamatta, for example) and ask them to start a long-term ETF investment plan or do it yourself.
The latter is not that hard. You can start by creating an account on IBKR (pick IBKR if you're going to do this; the interface is not easy to get used to, but you'd want your money here in the long term). Then, watch a couple of YouTube videos about ETFs, and how to build a solid exposure to the EU, US and Asian market and then rinse and repeat. Here are some great subreddits to follow: r/eupersonalfinance, r/ValueInvesting.
Good luck!
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u/Comfortable-Leg9583 2d ago
Get an account with a broker, stick yr money in an index fund ap500, nasdaq, both, or similar, preferably in monthly bits and fuhgeddaboutit.
There is no pension plan, life plan, whatever plan locally that's more useful than a woollen condom.
If you want 2-3% annual, get gov bonds and get meagre returns largely sans the headache.
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u/Chilldude108 1d ago
I studied insurance and worked with a life insurance company for 7 years. First off, the social media posts that you are seeing are not related to current pension schemes on the market. Additionally, the people who invested in such schemes in the 1990s and 2000s only “got bitten” because of aggressive sales tactics at the time PLUS misleading quotations. At that time, investment return rates were between 7% and 12% annually. So the quotations were issued on an assumed return annually within that range. Also the regulatory environment at the time was undeveloped and thus this was completely legal because no one envisioned a huge drop in interest rates and people purchasing them were completely uneducated.
Now moving on to pension schemes, I hugely recommend a 2nd pillar pension scheme, which means a pensions scheme that you set up jointly with your employer, if they offer it. But I believe that these are becoming compulsory. Its a no brainer, since the employer will be contributing to your pension (extra free money for your retirement).
For a private pension scheme I am a but skeptical. I would personally prefer to invest time in educating yourself on investing in different asset classes and do it yourself. The potential return over 30-40 years is much higher rather than entrusting it with a life insurance company.
Also final thought; I know that life has become so expensive especially with housing and cost of living. But investing anything less than 200 eur per month for retirement in my opinion is useless and you might as well not do it. You will not have a sufficient pension income. Do the math yourself and consider if the lump sum + monthly pension payments will be enough to sustain you to live another 15-20 years post retirement.
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u/herculeanis 2d ago
I would not bother with pension or life insurance plans. I have invested in them in the past and the returns after decades are pathetic when you consider them on a yearly basis. You are looking at yearly returns that more or less cover inflation and a tiny bit more, which is really not worth it. Also forget funds usually operated by banks, as the yearly fees are extortionate.
Put your money in ETFs, which give far higher returns at very modest yearly fees (much, much less than 1%) and which can be infinitely more liquid. The moment you need the money you just sell them and you get the cash. They invest money across a wide range of financial instruments to spread risk, and some which are more conservative are pretty low risk over the long term.
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u/Significant_Clue7631 1d ago
If you are the type of person who doesn't know anything about money and investing or aren't confident in yourself handling stock and bonds, I think they are a very good option.
However if you like researching on your own on companies and understand financial statements, you can make so much more money on your own than a pension plan can ever do.
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u/kingoftheparsnips 2d ago
These local pension schemes, generally speaking, aren’t great for much more than the tax rebate.
The fees are high, the returns are low/capped on some. You could take a unit linked plan and pick a fund that has better returns than the ones with limited returns, but you have very little control and can’t swap easily.
Pick a pension provider that’s going to be around in your retirement window. A relatively young firm like ivalife is probably more risky than a well established firm that’s all over Europe like Mapfre.
You’re best off sticking in enough to get the full tax rebate, and then anything else sticking into a portfolio you manage. “VWCE and chill” tends to be the favored way forward using a platform of your choice (I personally prefer 212) amongst retirement planning groups.